BARGE FREIGHT RATES

ARA independent product stocks climb

London, 3 November (Argus) — Independent oil product stocks in the Amsterdam-Rotterdam-Antwerp (ARA) region rose by nearly 4pc during the past week, with gasoline inventories up by more than 20pc as exports declined.

Around 370,000t of European gasoline was booked for 28 October-3 November loading with transatlantic options, down from 511,000t in the same period of the prior week, and shipments slowed to Latin America and to west Africa. Gasoline imports from the Baltic region climbed.

But exports of European gasoline to the US should increase this coming week. An explosion shut down the Colonial pipeline, which transports gasoline from the US Gulf coast to the US Atlantic coast earlier this week. A lot of material has been booked to be loaded on US-bound vessels after 4 November. US gasoline stocks fell last week — the latest EIA report showed a drop of 2.2mn bl to 223.8mn bl in the week to 28 October.

Rising demand for gasoline is also likely to bolster buying interest for naphtha from gasoline blenders. The previous shutdown of the Colonial pipeline, in September, lifted demand for naphtha cargoes for gasoline blending in Europe and for shipment to the US Atlantic coast.

During the past week, demand for naphtha from the petrochemicals sector and gasoline blenders in the ARA region was soft. The economics for exporting naphtha to Asia-Pacific remain weak, and tankers taking the product east are most likely taking term cargoes.

Naphtha stocks in ARA were little changed from a week ago.

Europe remained well-supplied with jet fuel during the past week, as ARA stocks climbed by nearly 2pc. Some tankers carrying jet fuel are sitting on the water waiting to offload. The Sti Lauren was chartered by trading firm Vitol to take 90,000t of product from South Korea to Singapore and northwest Europe. The vessel has been sitting offshore Southwold, UK, since 31 October.

Two other tankers chartered by Vitol only recently entered northwest European ports, having been sitting offshore. The Haima was moved in Le Havre, France, on 1 November after being having sat on the water since 16 October. It is carrying 90,000t of product from South Korea. The Front Lynx went into Rotterdam on 29 October, having sat offshore Southwold since 21 October.

Diesel stocks within the ARA hub rose slightly during the week. Imports from the US and the Middle East were low, while low water levels on the Rhine river continued to keep freight rates relatively high and limit flows of diesel inland.

Fuel oil stocks bucked the trend, falling by nearly 5pc as the product continued to be exported to Singapore. The very large crude carrier (VLCC) Cospearl Lake arrived in Rotterdam on 31 October to load for Asia-Pacific. Exports to Singapore have reduced supplies in northwest Europe, providing support to fuel oil margins.

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